Verify and reconcile accounts payable

Oct 13, 2025 by magicalceylontours.com 146 views

Year-End Financial Analysis: A Comprehensive Review of King Company's Account Balances

As the year comes to a close, businesses like King Company must conduct a thorough review of their financial accounts to ensure accuracy and compliance with accounting standards. On December 31, King Company had the following list of account balances, which will be the focus of this comprehensive review.

Understanding the Importance of Year-End Financial Analysis

A year-end financial analysis is a critical process that helps businesses like King Company to assess their financial performance, identify areas of improvement, and make informed decisions for the upcoming year. This analysis involves reviewing and reconciling all financial accounts, including assets, liabilities, equity, revenues, and expenses. By conducting a thorough year-end financial analysis, King Company can ensure that its financial statements accurately reflect its financial position and performance.

Review of King Company's Account Balances

On December 31, King Company had the following account balances:

Account	Amount
Accounts Payable	$33,900
Accounts Receivable	$26,800
Accumulated Depreciation	$12,500
Common Stock	$150,000
Cost of Goods Sold	$120,000
Depreciation Expense	$8,000
Equipment	$80,000
Income Tax Expense	$15,000
Inventory	$40,000
Land	$20,000
Net Income	$30,000
Notes Payable	$50,000
Retained Earnings	$60,000
Salaries Expense	$20,000
Sales Revenue	$180,000
Total Assets	$320,000
Total Liabilities	$143,900
Total Stockholders' Equity	$176,100

Analysis of Key Accounts

The following accounts require special attention during the year-end financial analysis:

Accounts Payable: King Company's accounts payable balance of $33,900 indicates that the company has outstanding payments to its suppliers. This amount should be verified and reconciled with the suppliers' invoices to ensure accuracy.
Accounts Receivable: The accounts receivable balance of $26,800 represents the amount owed to King Company by its customers. This amount should be verified and reconciled with the customers' payments to ensure accuracy.
Accumulated Depreciation: The accumulated depreciation balance of $12,500 represents the total depreciation expense recorded by King Company over the years. This amount should be verified and reconciled with the company's depreciation policy to ensure accuracy.
Common Stock: The common stock balance of $150,000 represents the amount invested by King Company's shareholders. This amount should be verified and reconciled with the company's capital structure to ensure accuracy.
Cost of Goods Sold: The cost of goods sold balance of $120,000 represents the direct costs incurred by King Company in producing its products. This amount should be verified and reconciled with the company's production costs to ensure accuracy.
Depreciation Expense: The depreciation expense balance of $8,000 represents the amount recorded by King Company for the depreciation of its assets. This amount should be verified and reconciled with the company's depreciation policy to ensure accuracy.
Equipment: The equipment balance of $80,000 represents the value of King Company's equipment. This amount should be verified and reconciled with the company's asset register to ensure accuracy.
Income Tax Expense: The income tax expense balance of $15,000 represents the amount recorded by King Company for its income tax liability. This amount should be verified and reconciled with the company's tax returns to ensure accuracy.
Inventory: The inventory balance of $40,000 represents the value of King Company's inventory. This amount should be verified and reconciled with the company's inventory records to ensure accuracy.
Land: The land balance of $20,000 represents the value of King Company's land. This amount should be verified and reconciled with the company's asset register to ensure accuracy.
Net Income: The net income balance of $30,000 represents the amount recorded by King Company for its net income. This amount should be verified and reconciled with the company's financial statements to ensure accuracy.
Notes Payable: The notes payable balance of $50,000 represents the amount owed by King Company to its lenders. This amount should be verified and reconciled with the company's loan agreements to ensure accuracy.
Retained Earnings: The retained earnings balance of $60,000 represents the amount accumulated by King Company from its net income. This amount should be verified and reconciled with the company's financial statements to ensure accuracy.
Salaries Expense: The salaries expense balance of $20,000 represents the amount recorded by King Company for its salaries expense. This amount should be verified and reconciled with the company's payroll records to ensure accuracy.
Sales Revenue: The sales revenue balance of $180,000 represents the amount recorded by King Company for its sales revenue. This amount should be verified and reconciled with the company's sales records to ensure accuracy.
Total Assets: The total assets balance of $320,000 represents the value of King Company's assets. This amount should be verified and reconciled with the company's asset register to ensure accuracy.
Total Liabilities: The total liabilities balance of $143,900 represents the amount owed by King Company to its creditors. This amount should be verified and reconciled with the company's financial statements to ensure accuracy.
Total Stockholders' Equity: The total stockholders' equity balance of $176,100 represents the amount invested by King Company's shareholders. This amount should be verified and reconciled with the company's financial statements to ensure accuracy.

Conclusion

In conclusion, King Company's year-end financial analysis has revealed several key accounts that require special attention. By verifying and reconciling these accounts, King Company can ensure that its financial statements accurately reflect its financial position and performance. This analysis will help King Company to identify areas of improvement and make informed decisions for the upcoming year.

Recommendations

Based on the analysis, the following recommendations are made:

Verify and reconcile accounts payable: King Company should verify and reconcile its accounts payable balance with the suppliers' invoices to ensure accuracy.
Verify and reconcile accounts receivable: King Company should verify and reconcile its accounts receivable balance with the customers' payments to ensure accuracy.
Verify and reconcile accumulated depreciation: King Company should verify and reconcile its accumulated depreciation balance with the company's depreciation policy to ensure accuracy.
Verify and reconcile common stock: King Company should verify and reconcile its common stock balance with the company's capital structure to ensure accuracy.
Verify and reconcile cost of goods sold: King Company should verify and reconcile its cost of goods sold balance with the company's production costs to ensure accuracy.
Verify and reconcile depreciation expense: King Company should verify and reconcile its depreciation expense balance with the company's depreciation policy to ensure accuracy.
Verify and reconcile equipment: King Company should verify and reconcile its equipment balance with the company's asset register to ensure accuracy.
Verify and reconcile income tax expense: King Company should verify and reconcile its income tax expense balance with the company's tax returns to ensure accuracy.
Verify and reconcile inventory: King Company should verify and reconcile its inventory balance with the company's inventory records to ensure accuracy.
Verify and reconcile land: King Company should verify and reconcile its land balance with the company's asset register to ensure accuracy.
Verify and reconcile net income: King Company should verify and reconcile its net income balance with the company's financial statements to ensure accuracy.
Verify and reconcile notes payable: King Company should verify and reconcile its notes payable balance with the company's loan agreements to ensure accuracy.
Verify and reconcile retained earnings: King Company should verify and reconcile its retained earnings balance with the company's financial statements to ensure accuracy.
Verify and reconcile salaries expense: King Company should verify and reconcile its salaries expense balance with the company's payroll records to ensure accuracy.
Verify and reconcile sales revenue: King Company should verify and reconcile its sales revenue balance with the company's sales records to ensure accuracy.
Verify and reconcile total assets: King Company should verify and reconcile its total assets balance with the company's asset register to ensure accuracy.
Verify and reconcile total liabilities: King Company should verify and reconcile its total liabilities balance with the company's financial statements to ensure accuracy.
Verify and reconcile total stockholders' equity: King Company should verify and reconcile its total stockholders' equity balance with the company's financial statements to ensure accuracy.

By following these recommendations, King Company can ensure that its financial statements accurately reflect its financial position and performance, and make informed decisions for the upcoming year.
Frequently Asked Questions: Year-End Financial Analysis

As a business owner, you may have questions about the year-end financial analysis process. Here are some frequently asked questions and answers to help you better understand the process.

Q: What is a year-end financial analysis?

A: A year-end financial analysis is a comprehensive review of a company's financial statements to ensure accuracy and compliance with accounting standards. It involves reviewing and reconciling all financial accounts, including assets, liabilities, equity, revenues, and expenses.

Q: Why is a year-end financial analysis important?

A: A year-end financial analysis is important because it helps businesses to:

Ensure accuracy and compliance with accounting standards
Identify areas of improvement and make informed decisions
Assess financial performance and position
Make informed decisions about investments, financing, and other business activities

Q: What are the key accounts that require special attention during a year-end financial analysis?

A: The key accounts that require special attention during a year-end financial analysis include:

Accounts payable
Accounts receivable
Accumulated depreciation
Common stock
Cost of goods sold
Depreciation expense
Equipment
Income tax expense
Inventory
Land
Net income
Notes payable
Retained earnings
Salaries expense
Sales revenue
Total assets
Total liabilities
Total stockholders' equity

Q: How do I verify and reconcile accounts payable?

A: To verify and reconcile accounts payable, you should:

Review the accounts payable ledger to ensure accuracy
Verify the amounts owed to suppliers
Reconcile the accounts payable balance with the suppliers' invoices
Ensure that all accounts payable are properly recorded and accounted for

Q: How do I verify and reconcile accounts receivable?

A: To verify and reconcile accounts receivable, you should:

Review the accounts receivable ledger to ensure accuracy
Verify the amounts owed by customers
Reconcile the accounts receivable balance with the customers' payments
Ensure that all accounts receivable are properly recorded and accounted for

Q: How do I verify and reconcile accumulated depreciation?

A: To verify and reconcile accumulated depreciation, you should:

Review the accumulated depreciation ledger to ensure accuracy
Verify the depreciation expense recorded
Reconcile the accumulated depreciation balance with the company's depreciation policy
Ensure that all accumulated depreciation is properly recorded and accounted for

Q: How do I verify and reconcile common stock?

A: To verify and reconcile common stock, you should:

Review the common stock ledger to ensure accuracy
Verify the amount invested by shareholders
Reconcile the common stock balance with the company's capital structure
Ensure that all common stock is properly recorded and accounted for

Q: How do I verify and reconcile cost of goods sold?

A: To verify and reconcile cost of goods sold, you should:

Review the cost of goods sold ledger to ensure accuracy
Verify the direct costs incurred in producing products
Reconcile the cost of goods sold balance with the company's production costs
Ensure that all cost of goods sold is properly recorded and accounted for

Q: How do I verify and reconcile depreciation expense?

A: To verify and reconcile depreciation expense, you should:

Review the depreciation expense ledger to ensure accuracy
Verify the depreciation expense recorded
Reconcile the depreciation expense balance with the company's depreciation policy
Ensure that all depreciation expense is properly recorded and accounted for

Q: How do I verify and reconcile equipment?

A: To verify and reconcile equipment, you should:

Review the equipment ledger to ensure accuracy
Verify the value of equipment
Reconcile the equipment balance with the company's asset register
Ensure that all equipment is properly recorded and accounted for

Q: How do I verify and reconcile income tax expense?

A: To verify and reconcile income tax expense, you should:

Review the income tax expense ledger to ensure accuracy
Verify the income tax liability recorded
Reconcile the income tax expense balance with the company's tax returns
Ensure that all income tax expense is properly recorded and accounted for

Q: How do I verify and reconcile inventory?

A: To verify and reconcile inventory, you should:

Review the inventory ledger to ensure accuracy
Verify the value of inventory
Reconcile the inventory balance with the company's inventory records
Ensure that all inventory is properly recorded and accounted for

Q: How do I verify and reconcile land?

A: To verify and reconcile land, you should:

Review the land ledger to ensure accuracy
Verify the value of land
Reconcile the land balance with the company's asset register
Ensure that all land is properly recorded and accounted for

Q: How do I verify and reconcile net income?

A: To verify and reconcile net income, you should:

Review the net income ledger to ensure accuracy
Verify the net income recorded
Reconcile the net income balance with the company's financial statements
Ensure that all net income is properly recorded and accounted for

Q: How do I verify and reconcile notes payable?

A: To verify and reconcile notes payable, you should:

Review the notes payable ledger to ensure accuracy
Verify the amount owed to lenders
Reconcile the notes payable balance with the company's loan agreements
Ensure that all notes payable are properly recorded and accounted for

Q: How do I verify and reconcile retained earnings?

A: To verify and reconcile retained earnings, you should:

Review the retained earnings ledger to ensure accuracy
Verify the amount accumulated from net income
Reconcile the retained earnings balance with the company's financial statements
Ensure that all retained earnings are properly recorded and accounted for

Q: How do I verify and reconcile salaries expense?

A: To verify and reconcile salaries expense, you should:

Review the salaries expense ledger to ensure accuracy
Verify the salaries expense recorded
Reconcile the salaries expense balance with the company's payroll records
Ensure that all salaries expense is properly recorded and accounted for

Q: How do I verify and reconcile sales revenue?

A: To verify and reconcile sales revenue, you should:

Review the sales revenue ledger to ensure accuracy
Verify the sales revenue recorded
Reconcile the sales revenue balance with the company's sales records
Ensure that all sales revenue is properly recorded and accounted for

Q: How do I verify and reconcile total assets?

A: To verify and reconcile total assets, you should:

Review the total assets ledger to ensure accuracy
Verify the value of assets
Reconcile the total assets balance with the company's asset register
Ensure that all total assets are properly recorded and accounted for

Q: How do I verify and reconcile total liabilities?

A: To verify and reconcile total liabilities, you should:

Review the total liabilities ledger to ensure accuracy
Verify the amount owed to creditors
Reconcile the total liabilities balance with the company's financial statements
Ensure that all total liabilities are properly recorded and accounted for

Q: How do I verify and reconcile total stockholders' equity?

A: To verify and reconcile total stockholders' equity, you should:

Review the total stockholders' equity ledger to ensure accuracy
Verify the amount invested by shareholders
Reconcile the total stockholders' equity balance with the company's financial statements
Ensure that all total stockholders' equity is properly recorded and accounted for